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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Particular bodies: local authorities: securities expressed in foreign currency

 Where a local authority (see CTM40860)

issues securities expressed in a currency other than sterling and the Treasury makes a direction under ITTOIA05/S755 the interest on those securities is:

  1. payable in full, and
  2. exempt from IT (but not CT) so long as the beneficial owner is not resident in the UK.  This exemption does not apply where the income of the beneficial owner is deemed for tax purposes to be the income of some other person.

Interest payable in full as the result of the direction is liable to assessment as

  • IT as investment income where it arises to an individual resident in the UK, or
  • CT where it is received beneficially by
    • a company resident in the UK, or
    • a company not resident in the UK, to the extent that the interest is chargeable under CTA09/S5 and S19.